- You don’t have any savings.
- You take out cash advances to pay other credit cards.
- You need to use credit cards to pay basic expenses.
- Your credit lines are maxed out.
- You can only afford the minimum monthly payment
- You have bounced checks.
- debt collection agencies and creditors are calling your home and work.
Common Solutions To Credit Card Troubles & Issues
There are various solutions to bad or serious debt issues that people can use. Unfortunately, very few people are aware of all the options that are available. Ultimately, the root of the debt problem dictates a lot about which solution is appropriate for your situation.
Debtors Anonymous – Debtors Anonymous is a service that is appropriate for consumers who have spending addictions, but still have the income and interest rates to be able to pay down debt on their own. According to Debtors Anonymous, this group “is a fellowship of men and women who share their experience, strength and hope with each other that they may solve their common problems and help others to recover from compulsive debting.” There are local branches, so visit debtors anonymous website for more information.
Debt Negotiation – Debt negotiation is a type of credit card debt consolidation program for consumers who have bad debts that are the result of a financial hardship. Hardships are broadly defined and deal with a number of financially catastrophic events, from loss of employment and divorce, to overwhelming medical bills or anything else that may have caused a consumer to accumulate high credit card balances and been unable to pay them back. Also known as debt settlement, these types of debt relief companies are able to settle outstanding bad or old debt for less than the current balance, and it is an appropriate solution for consumers who owe a lot and have serious debt difficulties.
Credit Counseling – This type of debt solution is appropriate for consumers who have the money to pay back their debt, but can use a reduction in their interest rates in order to pay off their debt faster or to make their monthly payment lower.
Solutions To Avoid For Debt Situations
The worst solution for consumers who are facing credit card debt problems are debt consolidation loans. For one, studies show that consumers who take out consolidation loans to pay off credit card debt find themselves in a similar situation several years later. The only difference is now they owe more because they have the debt consolidation loan plus more credit card debt. If the underlying problem is from overspending, a debt consolidation loan does not force someone to change their behavior. Making matters worse is the fact that many times these loans are secured by your property, which means this decision could potentially cause you to lose your home. With so many other debt options available, this rarely makes sense for consumers with serious troubles.
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Credit & Debt Concerns
What should I do if I am running into obstacles with the debt consolidation company I am working with?
There are a few. First and foremost, you should try to resolve the issues with them. Address what it is that you are displeased with specifically and see how they deal with it. Seeking a new service after one complication rarely makes sense because the fees that you will have paid are generally non-refundable with these types of programs. If they fail to deal adequately with what you are dissatisfied with, seek a new company to work with. You can submit an application for a free consultation with another debt provider here!
If the difficulties you faced with the service were egregious, take the problem to the Attorney General of the state you reside in and the Federal Trade Commission (FTC). Their job is to protect consumers from fraudulent and deceptive trade practices that harm people, and some companies have been shut down due to these types of complaints. You can file one online here: Consumer Sentinel.
The credit card counseling service I am using said that the creditors will re-age my accounts and show that I am current on my credit, but when I pulled my credit report, I still saw nothing but late and delinquent payment marks. What should I do?
This is a common issue that consumers complain about. First, you should remember that some credit card companies refuse to report the debts as anything but past due until you’ve made three consecutive payments. So if you just recently enrolled in the program, give it time before you jump to conclusions about whether or not the service is sufficient. If you have been in the plan for much longer than this, address the issue with the credit counselors to see what their side of the story is. Perhaps your concerns should be with the credit bureau who is reporting it this way, or maybe it is the creditor providing false information. Either way do not be afraid to make a fuss about it because ultimately it is your financial and credit future that is at stake here.